back-words... now hear this, or, say what?

Sunday, February 25, 2007
now hear this, or, say what?
this is an unseeming sequel/supplemental chapter to what i was talking about recently regarding music and rights and formats. it comes as no shock how money-grubbing corporations can be about business conducted decades previously, whether it was right or not. sometimes you need to accept the past as being in the past and move on, while learning from mistakes if possible. once again, here we have another argument about mp3 formats, but it isnt about which is better. no, this time its a revival of a nearly 20 year old dispute over patent licensing and subsequent arrangements. honestly, everyone and his brother have made use of playing and recording mp3 formatted sound documents, not to mention codecs. there are countless codec sources. is there really a point to all this any more? by now, it would seem that mp3 has become public domain and should be officially declared as such. as it is, there are so many other formats available that it really doesnt matter. this feels like a technological version of abbott & costello's "who's on first" skit. sure everything is based on something else by now; it only makes sense that would happen. its like building off the wheel- balls, hoops, cars, bicycles, carts, yo-yos, etc. should everyone be clamoring over who had the first version and whos remake is based on it? no, nor do they. i submit that neither should the technology industry behave so ridiculously. it feels like a playground and the industry needs someone to play kindergarten cop; its inane.
MP3's Loss, Open Source's Gain

By Eliot Van Buskirk

Alcatel-Lucent isn't the only winner in a federal jury's $1.52 billion patent infringement award against Microsoft this week. Other beneficiaries are the many rivals to the MP3 audio-compression format.

Backers of alternative formats have sought for years to replace MP3, which offers relatively lower quality sound than next-generation technologies -- including the nominal successor to MP3 itself, MP3Pro. Apple uses the MPEG industry standard, AAC; Microsoft uses its proprietary Windows Media format; and Sony has developed its own, largely ignored flavor. Open-source, royalty-free options, such as Ogg Vorbis, remain dark horse competitors. But none have displaced MP3, the first and most widely adopted format of all.

Now, with a cloud over the de facto industry standard, companies that rely on MP3 may finally have sufficient motivation to move on. And that raises some tantalizing possibilities, including a real long shot: Open-source, royalty-free formats win.

It's not immediately clear what the implications of Thursday's judgment are for other MP3 licensees, which include hundreds of companies who already pay royalties to Fraunhofer/Thomson -- previously accepted as the only licensor of MP3 technology.

Microsoft has 1.52 billion reasons to paint this as a disaster, not only for itself but for the entire industry. So says Tom Burt, Microsoft's corporate vice president and deputy general counsel.

"If this verdict is allowed to stand, companies will have to make hard choices about whether to continue to offer MP3 technology," he said in a statement sent to Wired News late Thursday. Licensees would have to "pay twice for the same technology -- one standard charge to the industry-recognized licensee of MP3 (Fraunhofer/Thomson), and again, an unprecedented amount to Alcatel-Lucent."

In truth, nothing has yet been decided. Microsoft plans to ask the judge to reduce the damage award and will appeal, according to a source close to the matter, so the ruling could yet be overturned or limited. On Thursday, an attorney for Alcatel-Lucent would not rule out the possibility of an all-out licensing campaign should the verdict stand; but he also acknowledged that the long-term result is very much up in the air.

"It wouldn't make sense to start suing everyone else until this case is resolved on the merits," said John Desmarais of Kirkland & Ellis.

Although Thomson is widely accepted as the licensor of Fraunhofer's MP3 codec, Alcatel-Lucent holds two MP3-related patents upheld by a jury yesterday: 5341457 and RE39080. (Neither patent is included in Fraunhofer/Thomson's suite.)

This confusing state of affairs started in the 1980s, when AT&T's Bell Labs and Fraunhofer started developing the codec under an agreement that both companies would be able to license aspects of MP3 developed during the collaboration. AT&T, which later became Alcatel-Lucent, spun Fraunhofer off in 1996, which then began licensing MP3 technology through Thomson.

A source close to the matter said when Lucent hit a rough patch financially after the dot-com bubble exploded, the company started looking to its patents as a means of pulling itself back into the black. Microsoft actually commenced the lawsuit that led to Thursday's verdict when it asked a judge to block Lucent's patent claims in order to protect its partners Dell and Gateway. After Alcatel bought Lucent last year, some onlookers thought the matter might end there. But Alcatel, sensing that there might be gold in those patents, decided to keep pursuing the suits. Audio is just the beginning; Alcatel-Lucent's patents for video, speech and user interface are still being contested.

In an e-mail to Wired News, IDC analyst Susan Kevorkian said she believes Alcatel-Lucent may have a legitimate claim to some of the MP3 royalties, but the proper target should be Frauenhofer and not its licensees.

"It looks like there's a flaw in the way that MP3 technology is being licensed, and that Alcatel-Lucent should have been cut into the licensing revenue from the beginning," she said. "If this is the case, then the dispute is between Alcatel-Lucent and Fraunhofer (and other contributors to the MP3 patent), and not between Alcatel-Lucent and MP3 licensees, including Microsoft."

It's hard to say which companies will be affected by Thursday's award. Those wishing to use MP3 have traditionally been subject to two sets of rules for using the codec: one for encoding, and another for playback. If the two patents upheld by the jury today apply only to products that encode audio into MP3s, the ruling would affect only companies such as Apple, Microsoft, Yahoo and others offering software that lets consumers make their own MP3 files.

If they cover playback too, every company involved even tangentially with MP3 stands to lose big. Microsoft's licensing bill for Thomson/Fraunhofer was only $16 million -- about 1 percent of what it now owes Alcatel-Lucent. A significant number of the companies who offer MP3 encoders and/or players could face a similar judgment, with many being driven out of business.

Regardless of the ultimate outcome, it's clear that a cloud of uncertainty now hangs over the MP3 format, and that alone could drive developers and manufacturers to less litigious pastures.

AAC is one potential alternative. The format achieves greater fidelity at higher compression rates than MP3 and has been licensed by Apple for its iTunes music store. Apple wraps AAC is a proprietary digital rights management scheme known as Fairplay that renders it unusable outside Apple's ecosystem. But AAC itself is an open format based on industry standard MPEG-4 technology. It's not royalty free, but with standards backing it's likely the strongest contender for a universal digital audio format.

Microsoft's Windows Media format similarly offers better performance than MP3 and could also see a boost, though it too includes a digital rights management component that has hampered its acceptance in the market.

One of the most interesting contenders is Ogg Vorbis, an open-source, royalty-free rival to MP3 that also represents a generational improvement in sound quality.

Microsoft has already used it for XBox games (Halo for PC was the first game with 100 percent Ogg Vorbis audio), and considering the way the MP3 licensing structure appears to be crumbling, switching to an open-source codec could start looking like a better idea with each passing day.

Vorbis is not a slam-dunk, however. Notably, its royalty-free claims have not been sanctioned by MP3 patent-holders and companies that adopt it could wind up with exactly the same legal headaches that Microsoft suffered this week over MP3. In fact, despite its longstanding regard among digital music aficionados, Ogg Vorbis has been unable to make serious commercial in-roads.

Some well-known devices and services support Ogg, notably some flash-based and hard-disk portable players from iRiver, but other devices are hampered by the amount of memory available on their DSP chips, and so cannot be upgraded to Ogg, according to Chris Montgomery, the creator of Ogg Vorbis.

Apple's iPod doesn't support Ogg now, but according to Montgomery, "ARM-based players like the iPod are ideal for decoding Vorbis." Apple could add Ogg Vorbis support to the iPod with a simple firmware update. Montgomery also told Wired News that Apple has had "several chances" to add Ogg support, but "passed each time."

Considering Steve Jobs' tough talk about getting rid of DRM, perhaps he'd be willing to go one better and switch from AAC to an open-source codec.

Added to the technical and political hurdles are non-technical obstacles to Apple and other manufacturers embracing Ogg Vorbis. Montgomery, who has had a lot of experience trying to convince manufacturers to adopt the codec, said the first problem with Ogg adoption is that "lawyers are paid to say 'no.'"

The second is that the same patents now being squabbled over by licensors of the MP3 codec could eventually threaten Ogg Vorbis. "To this day, we still have lawyers tell us they won't support Ogg because Thomson would come after them," Montgomery said.